The Harmonious Society, Corporate Social Responsibility and Legal Responses to Ethical Norms in Chinese Company Law

Abstract

In 2005, President Hu instructed China's leading officials and party cadres to put “building a harmonious society” at the top of their agendas in order to build a society that placed people first. This vision shifts China's primary focus from GDP figures and economic growth towards a more balanced, people-oriented and sustainable model, maintaining growth but also addressing social and environmental concerns. From the corporations' perspective, actions taken by the government in response to the need for a more harmonious society have increased the level of corporate social responsibility (CSR) in China, making it a more relevant factor in the process of rapid economic development. It is suggested that the progressive and enlightened changes involved in adopting social elements in Chinese company law (CCL), with an associated emphasis on the rights of employees and creditors, will promote CSR in Chinese companies. The vision of a harmonious society will also encourage positive corporate decisions for the benefit of social welfare beyond mere compliance with regulatory norms. It is necessary to promote a beneficial relationship between corporate economic responsibility and social responsibility within the corporate law framework, in order to make a significant contribution to China's development towards a harmonious society. After the enforcement of CCL 2006, despite positive progress between 2006 and 2011 (reflected in the data regarding the performance of directors' duties towards stakeholders), the rapid development of the Chinese economy also raises many social problems which remain a concern. The enforcement of CSR-related legal requirements still depends on political interference, public awareness and business disclosure of social and environmental issues, all in the context of improvements in and support for a sound legal system in China.